The American Bar Association is contemplating an amendment to Model Rule of Professional Conduct 1.8(e), which today forbids lawyers to “provide financial assistance to a client in connection with pending or contemplated litigation,” with exceptions for advancing “court costs and expenses of litigation” and, in the case of indigent clients, paying “court costs and expenses of litigation” outright. The amendment would make a third exception, in cases where the client is indigent and the lawyer is working pro bono or “through a nonprofit legal services or public interest organization” or a “law school clinical or pro bono program.” Under the new exception, the lawyer “may provide modest gifts to the client for food, rent, transportation, medicine and other basic living expenses if financial hardship would otherwise prevent the client from instituting or maintaining the proceedings or from withstanding delays that put substantial pressure on the client to settle.” The lawyer may provide such assistance “even if the representation is eligible for fees under a fee-shifting statute.”
I have had the unhappy experience of learning, midway through a major cross-border litigation, that counsel for the plaintiffs were paying the living expenses and other expenses of their extremely poor clients in a mass tort case in circumstances that, in my view at least, gravely threatened the integrity of the proceedings. It felt like a punch to the gut. I’m not going to write about the facts of the case, but if you want to read some eye-opening, publicly-filed papers that illustrate the problem, take a look at these—you will not be disappointed:
You may say that the danger of corruption that can occur in ordinary contingent fee litigation won’t occur in the cases within the exception to the rule, because it only applies to pro bono work. But the exception for cases where attorneys’ fees can be awarded makes that argument untenable, and in any event the argument underestimates the importance lawyers’ non-monetary motivations and the way in which money can corrupt the testimony of clients in service of the lawyer’s interest in, for example, advancing a particular legal theory, whether or not the lawyer is being paid.
In short, I think this amendment would be a big mistake, and that if it is adopted, states should nevertheless adhere to the traditional rule.